Yes Bank moves in to name wilful defaulters

MUMBAI: Private sector lender Yes Bank plans to declare former promoters of the bankrupt Cox & Kings, Peter Kerkar and his sister Urrshila Kerkar, wilful defaulters after the travel services firm failed to repay loans.
The wilful defaulters’ tag will make it tough for the Kerkars to borrow from banks and financial institutions. A Yes Bank spokesperson said the lender can’t comment on specific client matters.Yes Bank has the highest exposure to Cox & Kings, having sanctioned a credit of Rs 2,127 crore, according to the lender’s financial claim submission to the tour operator’s resolution professional overseeing the insolvency process.
In July this year, Yes Bank acquired 19% in Cox & Kings by invoking pledged shares. It also picked up 30% in Ezeego One Travel & Tours, a company promoted by Cox & Kings. Three months later, it acquired 21% in Tulip Star Hotel (earlier known as Centaur) in Mumbai.

The sea-facing five-star property was acquired by Peter and Urrshila’s father Ajit Kerkar, former chairman of Taj Hotels, from the government in 2001. However, Nirmal Lifestyle, in a public notice, has claimed stake over certain areas of Tulip as it has invested a “substantial” amount in developing it.
If a person is declared a wilful defaulter, then according to rules, banks cannot sanction any additional facilities to him/her. Banks can also initiate criminal proceedings against the person/s if it is found that funds have been diverted with mala fide intentions.
The serious fraud investigation office (SFIO) is reportedly probing the alleged siphoning of money by Cox & Kings’ erstwhile promoters. The debt default by Cox & Kings in June 2019 was perplexing as the company had cash of Rs 1,830 crore and trade receivables of Rs 2,400 crore in 2018, according to a news report.
RattanIndia Finance, one of the 22 financial creditors to Cox & Kings, had moved the company law tribunal to initiate insolvency proceedings against the travel services firm.
Recently, the tribunal directed Cox & Kings’ suspended board members to cooperate with the resolution professional. It also stated that the police will assist the resolution professional in taking possession of the tour operator’s assets.
Cox & Kings’ UK arm has been bought out of administration by luxury travel company Abercrombie & Kent. Law firm Irwin Mitchell, which assisted the deal, said the transaction safeguards all holiday bookings and 68 jobs of the UK unit.